Federal Government to Reconvene Panel On Naira-for-Crude Deal with Dangote Refinery

Federal Government to Reconvene Panel on Naira-for-Crude Deal with Dangote Refinery

The Federal Government’s Naira-for-crude panel is scheduled to reconvene on Monday to discuss the continuation of its crude supply agreement with Dangote Refinery amidst ongoing uncertainties over fuel prices.

Sources within the Ministries of Petroleum Resources and Finance, who spoke anonymously, confirmed this development on Thursday…………READ MORE

This follows Dangote Refinery’s recent decision to suspend the sale of petroleum products in Naira, signaling a deadlock in negotiations with the Nigerian National Petroleum Company Limited (NNPCL) regarding the ongoing crude-for-Naira arrangement.

Despite this standstill, sources close to the negotiations suggest that the scheme may still proceed. However, a key challenge remains the NNPCL’s limited crude availability, as large quantities have already been committed to foreign creditors through crude-backed loan agreements.

A government official shared that the NNPCL is struggling with crude availability due to these prior commitments. To address this, the committee has instructed the Nigeria Upstream Petroleum Regulatory Commission to explore alternative solutions, which will be reviewed in the upcoming meeting on Monday.

“The scheme will not end, but the main issue is crude availability, with NNPC having pre-sold significant amounts of crude,” an official explained. “The committee agreed to reconvene on Monday to review the solutions that the Nigeria Upstream Petroleum Regulatory Commission has been tasked with, and explore possible options.”

Last week, the committee gathered at the Ministry of Finance in Abuja to reassess the policy and reaffirm its commitment to the framework. Key stakeholders in the meeting included Finance Minister Wale Edun, who participated virtually, the Executive Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji, the Chief Financial Officer of NNPCL, and representatives from the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

Commenting on the situation, Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, emphasized that marketers are prepared for any disruptions in the market. “We are making preparations for any surprises. If unexpected events occur, we will have alternative solutions in place,” he said.

Similarly, Hammed Fashola, President of the Independent Petroleum Marketers Association of Nigeria, urged the government to revisit the agreement with Dangote Refinery to ensure the continuation of the Naira-for-crude policy, which he believes is crucial to stabilizing fuel prices.

“I advise the Federal Government to reconsider its agreement with Dangote to maintain stability in petroleum prices,” Fashola added.